Sliding riel prompts $3m sell-off, in Cambodia

The National Bank of Cambodia (NBC) has tapped its dollar reserves for a further US$3 million in a bid to stabilise the riel, which has depreciated in recent weeks despite a $4 million intervention last month.

A man changes currency Tuesday at a shop on Street 317

in Orussei 2 commune, Prampi Makara district. Photo By: Pha Lina

Two separate lots of $1 million will be put to auction today and Friday, with a third lot already auctioned on Monday, according to an NBC statement signed by director general Tal Nay Im.

The riel traded at 4,265 a US dollar on Tuesday, a 1.79 percent decline over 4,190 in mid-April, according to statistics compiled daily by the Ministry of Commerce.

The ongoing $3 million currency buy is the second recent NBC intervention to stabilise the riel, after a $4 million intervention in May did not stop the riel’s slide.

Commercial banks, licenced money changers and companies are eligible to bid at the three auctions this week, taking place at the NBC’s headquarters on Norodom Boulevard in Phnom Penh, the statement said.

Vong Rithy Exchange prevailed from among nine bidders with a winning bid of 4,232 riels per dollar for Monday’s $1 million lot, said a central bank official on Tuesday. The official requested anonymity.

The exchange is located near Olympic Market in Phnom Penh.

Cambodia Institute for Development Study President Kang Chandararot estimated there is around US$500 million worth of riels in circulation in Cambodia.

The recent depreciation of the Kingdom’s currency is due to a strengthening US dollar in all international markets, especially against the euro, he added.

Other experts have said that a seasonal decline in capital inflows to Cambodia denominated in US dollars causes the riel to depreciate, and that they are so far not concerned by the slide.